Any business that is in the business of producing goods, either for the wholesale market or to distribute directly to consumers, has to have a keen understanding of loss. We’re talking about lost time, lost work and lost goods. At the end of the day, they all mean the same thing. Lost money and a lower return on investment. Any one problem resulting in a little loss might seem negligible. However, on the long-term, they can contribute to a culture of loss that makes a business unprofitable at the end of the day. For that reason, we’re going to look at what makes the best approach to loss prevention.
One of the problems with loss is that its effects can seem to be invisible until it’s too late. It’s easy to ignore a faulty product here and there. That is until you get the real data behind what it all means. Any business that’s producing goods should be tracking the metrics telling them how truly productive or inefficient they are. Metrics like energy cost per unit, return on assets, and cost as a percentage of revenue are going to act as scales. Every time you enact a loss prevention tactic, these are the metrics you continue to track to see whether or not you’re truly moving in the right direction.
Plan the approach
There are a lot of ways to lose valuable time in the production process. The truth is that you might find you have more than you can cope with at any one time. Yet, there is not always a direct correlation between the amount time a problem costs you and the amount of time it would take to fix that problem. While you’re spending weeks working on an issue that costs you 10 hours a month, you might be missing a problem that could be fixed quicker but is costing you 50 hours a month. For that reason, you need to plan your approach with downtime management software like XL from Vorne. This helps you find the highest priority issues to start with and work your way through them.
Map out your processes
Time lost isn’t necessarily because of downtime, either. Your production line might be working at full power all day, but that doesn’t mean you’re necessarily getting the best possible results out of it. You need to think about how and in what order they’re working. What processes do you need to wait to finish before another can begin? How much time could you save by moving equipment around? Are there any bottlenecks that slow the whole project down? Creating a flowchart of workflow can help you address those questions and find ways to work around bottlenecks and find the best placement for all of your equipment.
Manage a better inventory
Managing inventory for a business is a tricky problem to navigate. Having too much is just as bad as having too little. If you have too much, you don’t just have to consider the cost of buying all the inventory in bulk. You have to be concerned with the amount of space you’re using to store that inventory. Could it be used to store something that you can no longer bring in? Do you have to maintain the temperature or humidity of where you’re storing that inventory? If so, then you’re adding to your inventory cost with every moment. On the other hand, running out of inventory can shut the whole process down. It’s best to run an electronic system that tracks the usage of resources so you can order more accurately to the demand of those materials.
Don’t skimp on maintenance
One range of inventory that always needs to be kept a little on the surplus side is the components for the machinery that keeps the heart of the business ticking. Most industrial equipment will list the replacement parts you should keep on hand. That’s only one of the ways you can reduce the amount of time you have to spend doing reactive maintenance to your equipment. A better way, however, is to spend more time on preventative maintenance instead. Design an effective maintenance plan for every piece of equipment in the factory and don’t neglect it no matter what you do. Equipment malfunctions are a leading cause of downtime, as well as faulty goods.
Never underestimate a good clean
Indeed, if faulty goods are a common result in your production line, then you need to look closer at what’s causing them to come out faulty. It’s not always down to the equipment, it might be down to the state of the materials and the products between different processes. For instance, there are a lot of opportunities for dirt, grime, and dust to accrue. When dealing with precision tools, that kind of dirt can cause inaccuracies that become big faults. In designing and producing tech goods, a millimeter of difference can make a product unusable. While it’s important to clean and maintain your equipment, you should consider doing the same for your goods. Using clean spaces from producers like Laser Light Technologies between processes can severely lower the risk of defective goods.
Your equipment isn’t going to be the only source of lost time and lost goods, either. Human error is a factor that we have to accept as long as we have any kind of manual operation of the production processes. You can never truly get rid of the risk of human error, but you can significantly reduce it by having people less involved. Automated production tools will still have a need of operators to some degree. That said, their ability to repeat commands without even the slightest variation will cut out one of the largest sources of error in manufacturing.
One skilled employee isn’t enough
You might be very happy to rely on people, especially if they show that they have a very small margin of error, themselves. But don’t rely on any one person too much. If they are the only person with a certain skill that you need to keep productive, then they are the vulnerability of your business. What happens if they decide to leave the business or retire? What happens if they injured themselves or ask for a day off? Do you simply shut down as long as they’re not there? That’s a risk you have to contend with so long as you don’t spread those skills throughout the business. Consider having them lead a cross-training effort to make sure that they’re not the only one with the skill you need.
But all employees matter
That said, it’s still not acceptable to be losing employees to injury. The production line that goes without health and safety incident is the line with the best chances of success. Injury isn’t always preventable, but when it is, you shouldn’t accept any error. Make sure that training briefings are a common occurrence in the business. If anyone shows the slightest sign of making a mistake or cutting corners, then make them take the training again. Ensure the personal protective equipment is kept in stock and checked for defects regularly. Make sure that access is given accordingly to those who need it. People who have no use for specific pieces of dangerous equipment should be nowhere near them.
The mechanics of motivation
As long as you rely on human labor, whether it’s in inventory management and transport, operations, maintenance, or even cleaning, motivation matters. The less engaged people are with their work, the less likely they are to be putting their effort into being as productive as possible. In an industry like manufacturing where jobs can often be repetitive, that’s a very common and also a very serious risk. So, you have to do what you can to incentivize productivity. For instance, set key performance indicators for goals you want them to achieve. If they do, then you could offer them a seasonal bonus or longer breaks throughout the rest of the period. You should also incentivize them to think, not just to work. Have a policy of giving a reward to anyone who comes up with a solution that reduces loss or improves efficiency, for instance.
Have a long term goal
Using metrics to track your progress is one thing. Having a goal at the end is another thing entirely. People focus better on a challenge if it has a clear-cut objective. As they hit milestones along the way, you can offer workplace-wide rewards to keep the momentum going, too. In the production line, one goal you want everyone focused on is overall equipment effectiveness. This means cutting out things like availability loss, performance loss, and quality loss. It quantifies the journey and provides steps you can use to create a real long-term strategy.
Loss isn’t just caused by human error nor is it just caused by material loss. It’s also about what slows and stops the work process. You need the right mix of approach to people, materials, time, and money.